Basic Overview
The US dollar remains in a bearish mood as US data points to continued strong growth with low inflation. Yesterday, we got a good US retail sales report which suggests that stories of deteriorating consumer spending are overblown. Overall, this should support a soft bearish narrative and be positive for risk sentiment.
On the other hand, the Australian dollar continues to gain against the US dollar due to risk sentiment. This morning we saw further weakness in the US dollar, which may be due to the heavy selling in the USD/JPY pair, as flows there may spill over to other markets.
On the monetary policy front, the Australian dollar remains supported by the hawkish Reserve Bank of Australia as inflation remains steady. The next major event will be the Australian Q2 CPI report on July 31.street.
AUDUSD Technical Analysis – Daily Time Frame
AUDUSD Daily Currency Pair
On the daily chart, we can see that the AUD/USD pair fell to the support level at 0.6713 and bounced off it as buyers stepped in to take a position to continue the uptrend. Sellers will need the price to drop below 0.6713 to regain some control and take a position to the downside to 0.66 after that.
AUDUSD Technical Analysis – 4-hour timeframe
AUDUSD 4 hours
On the 4-hour chart, we can more clearly see the bounce from the support level and the increase in momentum this morning amidst the general weakness in the US dollar. There is not much we can conclude from this time frame, so we need to zoom in a little bit more to see more details.
AUDUSD Technical Analysis – 1-Hour Timeframe
AUDUSD 1 hour
On the 1-hour chart, we can see that the price has reached a major resistance level around the 0.6750 level where the price has been rejected several times in the past weeks. Buyers will want to see the price rise higher to increase bullish bets to new highs.
On the other hand, sellers are likely to step in around this level to position themselves for a break below 0.6713 with a better risk-reward setup. The red lines mark the average daily range for the day.
Upcoming incentives
Today we have Waller, the Fed member, and tomorrow we conclude with the Australian labor market report and the latest US unemployment claims numbers.